(Reuters) - News Corp is expected to name Robert Thomson, a close confidant of Chairman and CEO Rupert Murdoch, to lead its new publishing company by the end of next week, according to sources familiar with News Corp's plans.
Thomson is currently managing editor of the Wall Street Journal and editor in chief of its publisher Dow Jones & Co, which News Corp acquired in 2007. Gerard Baker, currently the deputy editor of the Journal, is expected to succeed Thomson, according to these sources.
Murdoch will be relying on his trusted lieutenant to steer the new company - whose main assets apart from Dow Jones include its British and Australian newspapers and HarperCollins book publishing business - at a difficult time. Newspapers in many developed markets are suffering from a severe drop in advertising revenue and circulation is being hit as readers are choosing to get their news on smartphones and tablets.
Among the key decisions Thomson will have to make include what to do about the financially struggling New York Post and whether the new company will go on an acquisition spree for other U.S. newspapers that could come on the market, such as the Los Angeles Times and the Chicago Tribune.
Thomson and Baker were not immediately available for comment. Representatives for Dow Jones and News Corp were also not immediately available.
In June, News Corp said it was separating its publishing and entertainment assets in response to shareholders who had pressed News Corp to get rid of its troubled newspapers business after a phone hacking scandal tainted its British newspapers and forced the company to drop its proposed acquisition of pay-TV group BSkyB.
News Corp is still finalizing the details of other executive appointments within the new company - a decision that could delay the announcement of the appointments of Thomson and Baker, one of the sources said. It wasn't immediately clear whether the role of Dow Jones CEO Lex Fenwick will change in any way.
Murdoch will hold the chairman title at the publishing company after its split from the entertainment side, which will include most of the group's TV and movie studio assets and where he will remain chairman and CEO.
The confirmation of Thomson's long-rumored appointment to CEO of the publishing company appears to have sidelined any plans Murdoch may have had to bring his eldest son, Lachlan, back into the family business fold. News Corp watchers and industry experts had assumed that Murdoch would push hard to recruit Lachlan given his son previously had some success as publisher of the New York Post.
The Australian-born Thomson was appointed to oversee the newsroom of the Journal and Dow Jones Newswires shortly after News Corp's $5.6 billion acquisition of Dow Jones from the Bancroft family in 2007. Thomson was editor of News Corp's Times of London and before that he was at the Financial Times where he led that paper's expansion in the U.S.
He recruited Baker in 2008 from the Times of London where he was heading up its coverage in the U.S.
While the newspaper industry is facing stiff challenges, News Corp has invested in the Wall Street Journal, adding new sections - including one that covers New York and one that focuses on real estate, while other papers have retrenched by slashing pages and frequency of publication. The Journal has risen to become the No. 1 daily newspaper in the U.S. and has broadened out its coverage beyond Wall Street to include more political and general news in an effort to compete with the New York Times.
The splitting of News Corp into two publicly traded companies will likely be completed by the end of June.
New Corp's film and television businesses include the 20th Century Fox film studio, Fox broadcasting network and Fox News channel. The entertainment business, which generated revenues of $24.7 billion in the year ending June 2012, would dwarf the publishing unit, which posted $8.2 billion in revenue.
(Reporting By Jennifer Saba in New York; Editing by Peter Lauria and Martin Howell)